The Hamas government in Gaza said on Tuesday it had reached a deal
with the Palestinian Authority on the supply of fuel to the coastal
enclave, which has been hit by a severe power crisis.

The deal was confirmed by the rival Palestinian Authority government
in Ramallah, though it said the deal was contingent on Gaza´s
electricity company -- under Hamas control -- paying for the fuel
deliveries.

Hamas spokesman Taher al-Nunu announced "a deal with our brothers in
Ramallah on the delivery of fuel for the Gaza power station, under
which the public petrol company will deliver 500,000 litres a day
starting tomorrow."

"The price of the delivery will be covered by the Gaza electricity
company´s revenue," he added.

"The electricity company has transferred two million shekels
($540,000, 400,000 euro) as a deposit for this agreement and we hope
that its application as agreed with our brothers in Ramallah will
begin to solve the electricity crisis in Gaza."

The spokesman for prime minister Salam Fayyad´s government in the
West Bank noted that the Palestinian Authority had already secured
the delivery of more than 400,000 litres of diesel fuel from Israel
for the power station last month.

"This is a temporary measure that will be carried out so long as the
electricity company in Gaza continues to pay the petrol company the
necessary funds," Ghassan Khatib told AFP of the new agreement.

The deal was agreed after talks held in Cairo between Egyptian
officials and representatives from the Hamas and Palestinian
Authority governments.

Hamas foreign minister Mohammed Awad said the agreement would
compliment an earlier deal between Hamas and Egypt to work to resolve
Gaza´s long-standing electricity problems.

That agreement, announced by Hamas on February 23, called for three
stages, the first of which would see Egyptian companies pumping fuel
directly to Gaza under the terms of contracts signed with the firms.
The second part of the agreement called for the Islamic Development
Bank to fund a project to upgrade and increase the capacity of Gaza´s
sole power plant by 40 megawatts.

The third phase of the deal would connect Gaza´s electricity grid to
Egypt´s and would convert the Palestinian territory´s power plant,
which currently supplies around a third of the Strip´s electricity,
from diesel to gas.

Gaza, with its population of nearly 1.6 million, has long suffered
outages because of fuel shortages at the plant, which has a maximum
capacity of 140 megawatts but for some years has only been able to
generate around half of that when operational.